Markets keep reeling in red; IT and Tech drag

Indian markets are not getting any respite from their series of downfall and were trading lower by around a quarter percent, though there were some attempts of bounce back but they were too little to take the bourses in green. On the other hand while, there was selling in some bluechips that was dragging the markets lower, the major drag was still coming from the IT sector, led by the country’s largest software exporter TCS, witnessing fall of around 4 per cent after the company reported a 27 per cent dip in its March quarter net profit, impacted by a one-time Rs. 2,628-crore employee bonus. Traders have even over looked the report of Moody’s analytics, a group company of global rating agency Moody's stating that Indian economy is expected to grow marginally higher at 7.3% during the year compared with 7.2% in 2014 and interest rate cuts will buttress private sector spending. Profit booking was not only limited to the IT and tech sector stocks but rate sensitives like banking and auto along with defensive healthcare too were trading in red. On the other hand there was some strength in oil & gas sector stocks as the government has exempted oil producers ONGC and Oil India from payment of fuel subsidy in the fourth quarter after the finance ministry agreed to meet all of the revenue loss on fuel sales.

The BSE Sensex is currently trading at 28574.42, down by 91.62 points or 0.32% after trading in a range of 28515.30 and 28696.19. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices too were trading in red; the BSE Mid cap index was down by 0.71%, while Small cap index lost 0.36%.

The top gaining sectoral indices on the BSE were Metal up by 1.69%, PSU up by 0.55%, Oil & Gas up by 0.30%, FMCG up by 0.22%, Power up by 0.10% while, IT down by 1.74%, TECK down by 1.62%, Bankex down by 0.69%, Auto down by 0.41%, Realty down by 0.37% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.28%, Sesa Sterlite up by 2.82%, Hindalco up by 2.73%, NTPC up by 1.15% and Cipla up by 0.98%. On the flip side, TCS down by 3.66%, Sun Pharma Inds down by 2.35%, Wipro down by 2.01%, Bharti Airtel down by 1.45% and Hero MotoCorp down by 1.32% were the top losers.

Meanwhile, Finance Minister Arun Jaitley, in his keynote address at the day-long conference 'Deepening the US-India Commercial Partnership: The First Year of the Modi Government', while acknowledging that high growth was essential to meet the challenges posed by the country's burgeoning young population, highlighted that India very much had the potential to achieve 9-10% growth rate which could be its “new normal”.

Pitching India’s growth story, Finance Minister Jaitley while listing out the steps being taken by the new Indian government like giving more financial powers to states, increased investment on infrastructure, emphasis on manufacturing, underscored that the roadmap laid out was to attract more foreign investment.

Further, the minister also asserted that implementation of the landmark Goods and Services Tax (GST) regime proposed from April 1 next year would push India's GDP by 1-2%. However, he did accept that land reform bill had become a contentious issue in India.

Nevertheless, the minister emphasized that his government was trying to bring down the period in opening up new projects and had also set up a new committee to look up into the whole mechanism of how, whole institution of prior permission can be refurbished into regulatory mechanism, where it is far easier to start your business just complying with the guidelines that have been stated in that area.

The CNX Nifty is currently trading at 8659.80, down by 46.90 points or 0.54% after trading in a range of 8638.25 and 8699.85. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Sesa Sterlite up by 3.21%, Tata Steel up by 3.20%, Hindalco up by 2.99%, PNB up by 1.39% and Cipla up by 1.36%. On the flip side, Lupin down by 4.39%, TCS down by 3.56%, Indusind Bank down by 3.04%, ACC down by 2.80% and Yes Bank down by 2.72% were the top losers.

Asian markets were showing a mixed trend, FTSE Bursa Malaysia KLCI was tad higher by 0.34 points or 0.02% to 1,848.28, KOSPI Index was up by 3.6 points or 0.17% to 2,143.50, Hang Seng gained 73.28 points or 0.26% to 27,812.99 and Shanghai Composite surged by 100.36 points or 2.39% to 4,295.18.

On the other hand, Nikkei 225 plunged by 232.89 points or 1.17% to 19,652.88, Taiwan Weighted lost 85.94 points or 0.89% to 9,570.93, Straits Times was down by 11.78 points or 0.33% to 3,519.83 and Jakarta Composite was marginally lower by 0.36 points or 0.01% to 5,420.38.